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Double-digit premium increases predate PPACA

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The latest salvo in the growing debate over Obamacare’s impact on premiums has been launched — this time by no less an authority than one of the architects of both the president’s and Mitt Romney’s health care reform plans.

In a new brief published by The Commonwealth Fund, MIT economics professor Jonathan Gruber took a closer look at premium increases before the Patient Protection and Affordable Care Act was enacted. Crunching numbers from the National Opinion Research Center, Gruber shows years of double-digit premium increases before health care reform was even a bill, let alone the law of the land.

On average, premiums increased by 9.9 percent in 2008, 10.8 percent in 2009, and 11.7 percent in 2010, the study shows.

The study examined premiums for people buying coverage on their own, not as part of employer-sponsored coverage.

Gruber’s analysis also points to a pair of other key findings.

The first is the wide variation of premium price points between states.

“There is enormous variation in rate increases across states. In 2008, state average rate increases ranged from 2.8 percent in Iowa to 14.7 percent in Wisconsin; in 2009, from 4.1 percent in New Jersey to 20.1 percent in Connecticut; in 2010, from 3 percent in Idaho to 21.8 percent in Nebraska,” Gruber writes, adding that no clear pattern emerges to explain the disparities.

Finally, the research also showed wild premium disparities among carriers even in the same state.

Gruber’s argument for the study was simply context, writing, “Before we can evaluate the impact of [PPACA] on health insurance premiums in the individual market, it is critical to understand the pricing trends of these premiums before the implementation of the law.”

Gruber acknowledged “limitations to these data” because it is based on just 22 states where information was available. Still, he said, it provides a snapshot of the market before PPACA to help track how the law is affecting the marketplace.

The report “reminds us that before the law many families buying coverage on their own saw their premiums skyrocket even when their plans didn’t adequately cover the care they needed,” said Commonwealth Fund President David Blumenthal.

Premium increases under the law has been a major point of contention.

Last month, analysis from Avalere Health predicted double-digit premium increases because of Obamacare. And previously, a survey of brokers by Morgan Stanley health care analysts concluded health premiums are rising so sharply that, in some states, increases are in the triple-digits. 


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